US targets China, Turkey and UAE in latest Russia sanctions

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The US has increased it sanctions against Russia, targeting companies and individuals in Turkey, China and the United Arab Emirates for supplying Moscow with goods that can be used for military purposes.

The new measures include additional action against the Russian energy and mining sectors, and lists more than 200 names around the world facing financial and travel restrictions, the US Treasury and the state department said on Thursday.

“Russia is dependent on willing third-country individuals and entities to resupply its military, and perpetuate its heinous war against Ukraine, and we will not hesitate in holding them accountable,” Janet Yellen, Treasury secretary, said.

The US action is primarily aimed at stopping Russia from sidestepping existing sanctions against its defence industry, often through circuitous routes via friendly countries.

In the 20 months since president Vladimir Putin ordered the full-scale invasion of Ukraine last year, Russia has sought to source critical imports by rerouting supply chains and financial flows through Turkey and the UAE, as well as former Soviet countries in the Caucasus and Central Asia.

In the UAE, ARX Financial Engineering and four of its employees were placed under sanctions for allegedly allowing Russians to transfer assets into the Gulf state and identifying ways for sanctions-hit Russian bank VTB to convert roubles into US dollars. ARX is a regulated entity in the Dubai International Financial Centre, which has attracted many global financial groups.

ARX and DIFC did not immediately respond to a request for comment. 

The UAE government has always maintained that it does not discriminate against Russians while also preventing financial inflows of individuals who have been placed under sanctions. It did not immediately respond to a request for comment.

The sanctions against several Turkish groups were mainly focused on suppliers of technology and electronics to Russia, which have been flowing either directly or through other intermediaries, according to several diplomatic sources. 

Turkey has not aligned itself with the western sanctions regime and has retained strong economic and trade ties with Russia, complicating the enforcement of restrictions. Turkish officials say the country takes measures to ensure that local companies do not engage in sanctions circumvention. 

The new US restrictions come at a delicate time for US-Turkey relations, with Turkey’s president Recep Tayyip Erdoğan repeatedly hitting out at Israel and its allies in recent days. Washington is also pushing for Ankara to approve Sweden’s accession to the Nato military alliance, a decision that is sitting with Turkey’s parliament. 

The US also targeted a Chinese group that Washington believes to have “shipped radar components to a Russian state-owned missile manufacturer for use in advanced anti-aircraft missile systems”.

That designation has come even though the US has been looking to stabilise relations with Beijing, including a planned meeting between US president Joe Biden and China’s president Xi Jinping in California at the Asia-Pacific Economic Cooperation summit later this month.

The state department also imposed sanctions on several Russian companies, including one mining group trying to develop the largest titanium ore deposit in the world, as well as the operator of the Arctic LNG 2, a large liquefied natural gas export project due to come online by the end of the year.

While the US has not sanctioned exports of Russian LNG, it had previously sanctioned entities providing services to the construction of the liquefaction project. The latest sanctions will aim to hit Russian plans to increase LNG exports to 100mn tons by 2030.

Other Russian technology, electronics and aerospace companies were also added to the list of entities under US sanctions.

The US also targeted a number of individuals, including Yakub Zakriev, the Chechen agriculture minister who Putin appointed to run Danone’s Russian assets after seizing the company in July.